The United States gross domestic product (GDP) showed growth, expanding by 0.7% in the fourth quarter of 2022 and rising by 2.1% for the entire year, according to a second estimate released by the Bureau of Economic Analysis (BEA).
As the world’s largest economy, the United States also posted a positive trajectory after a 0.8% gain earlier in the year, with a slight step back in growth during the third quarter of 2022.
For the full year 2022, the 2.1% expansion was notably slower than the 5.9% pace recorded in 2021, reflecting the varied pace of economic activity across sectors and the evolving domestic and international environment.
On a fully annualized basis, which is BEA’s preferred presentation method, United States GDP increased by 2.7% in the fourth quarter, a figure that was two-tenths of a percentage point below the initial estimate and about a half percentage point beneath the third quarter’s growth rate.
Growth occurred against a backdrop of modest inflation, a robust labor market, ongoing supply chain uncertainties, and higher interest rates. These factors collectively influenced the pace of expansion and shaped the quarterly outcome.
Within the quarterly dynamics, the BEA attributed the fourth-quarter slowdown to weaker exports and softer consumer spending, coupled with slower non-residential fixed investment and a drag from government and local government expenditures.
There were offsetting factors at play as well. Private investment in inventories contributed positively to the overall growth, while residential fixed investment declined by a smaller amount than in prior periods. Additionally, federal government spending helped to cushion the pace of growth, contributing to a more balanced mix of demand and activity across the economy.
Overall, the fourth-quarter results illustrate how a combination of consumer behavior, business investment, and government outlays influenced the trajectory of annual GDP. The annualized framework helps policymakers and analysts compare periods with different lengths and intensities, providing a clearer view of the underlying momentum in the economy.